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Last updated: April 8, 2009 11:37 am
Not since 2002 have students graduating from an MBA programme seen such jobs uncertainty. Many will have to completely rethink their career plans, abandoning plans to work on Wall Street or in the City of London and opting instead for jobs in manufacturing companies or even in not-for-profit organisations. Many will find their plans to work in an overseas country foiled by the credit crunch.
In the first in a series of monthly Jobs Clinics, the Financial Times has brought together two experts in the field of MBA recruitment.
Bruce Lane is Vice President of MBA Focus, based in Columbus, Ohio, which works with recruiters and students from 60 of the world’s top MBA programmes to help both recruiters and graduates optimise their recruiting efforts.
Sandra Schwarzer is Director of Careers Services at Insead, which has campuses in Europe (Fontainebleau) and Asia (Singapore).
If you are a student worried about your career prospects, or a recruiter hoping to take advantage of the oversupply in the MBA market this year, send your questions for the next online Jobs Clinic held on Wednesday April 8 between 14.00 and 15.00 BST at http://www.ft.com/businesseducation/jobsclinic/apr2009
I am a chemical engineer with 12 years experience across bio/pharma, power generation and refining. I am now a project manager for an engineering consultant. I recently completed my MBA by distance learning with the Open Univeristy. I was hoping to move into consulting. Any consultancies I have spoken with have baulked either at my background/relevance to their activities or when discussing salary – they hope to pay 60-70k and I earn more currently as a contractor. What sector/location of consultancies are hiring, what are they looking for and what sort of salaries are they offering?
Kenneth Sheeran, Cork, Ireland
Bruce Lane: Your background in engineering and bio/pharma, power generation and refining are still bright spots in today’s economy. Companies consulting in this space also seem to be doing well compared with other sectors. There could be a number of reasons why the consultancies you have contacted have balked at your background/relevance. Have you been a consultant in the past or are you looking to move in a new career direction? Switching careers in this market is tough because you are competing against candidates who have consulting experience. What compensation range are you expecting? Again, if you are changing careers and really want to be in consulting you may have to take a pay cut.
I would suggest capitalising on what you have done for the past 12 years and try to move into an internal consulting role with your current company or a new one. You can leverage what you’ve done to help you get to where you want to be. They would welcome your engineering background and you could use the skills you learned in your MBA programme to help the company move forward.
Sandra Schwarzer: Kenneth – it is difficult to make a general statement about consulting salaries as they do depend on your background and experience. Firms generally look for strong analytical skills, leadership capacities, very good project management skills, strong client focus and communication skills. In general, consulting firms will hire you into a certain level (post MBA) but give you good prospects to grow. Although you do not have a consulting background, given your experience you might want to look at some of the boutique firms. You will most likely have to make some concessions – if your dream is to switch careers into consulting, the salary is likely to be less than in your current contractor position.
Given the deteriorating economic situation, will the 2010-2011 MBA graduates from the most prestigious schools have no choice but to agree to the same salary levels offered to the graduates of less competitive, second-tier schools?
Anna, Washington DC
BL: In past downturns the salary levels offered to graduates of top business schools were still very competitive and significantly higher than salaries offered to graduates of second-tier schools. This seems to be holding true for the current graduating class. Rather than lowering salaries, companies are keeping them competitive but not hiring as many students. Signing bonuses are down this year. Companies know that if they lower salaries because of the market, students will accept the offer but be ready to move to a higher paying company when things improve.
SS: Anna, we have not yet seen a big decline in salaries although this did happen during the last downturn – but the decline applied to all salaries (not MBA specific). The salary really depends on a persons’ experience, background, the organisation and country – at Insead the salaries in 2007 ranged from €13,000 to €240,000! I generally tell people to look beyond the figure – take into account additional perks, health insurance, relocation, training and mentoring programmes. At the end of the day you need to decide what is the most important for you – the salary, the function, the career prospects etc.
I am 26 and working with a top telecoms company in India. I have three years’ work experience and I’m looking to start an MBA programme in 2010. However, due to the current economic slowdown I am fearful for my job prospects after completing the course. Considering my age and work experience, should I wait for the situation to improve? Many of my friends face a similar dilemma.
BL: It all depends on your situation and where you think your employment prospects will be when you finish your MBA. I would have a longer range plan than just a job at graduation. Where do you want to be 5 years from now? If having an MBA will help you achieve your goals more quickly then now is a good time to enroll in an MBA programme. Jobs will always be available for great candidates!
SS: Sameer, ask yourself why you are doing the MBA, and whether a couple of years more work experience might make the programme even better. We have some students with two years’ work experience, others with fiteen years or more, and all of them take something valuable out of their experience; on average, our students have six years’ experience. Ask yourself what experience you can gain in addition to what you have now, that would make pushing the start date worthwhile. For example, if your company allows you to gain people or project management experience, if you can move abroad or enter a functional area that you have not previously tried, I think it will help you get more out of the MBA programme. Most programmes are based on business cases and experience sharing. Now, I would recommend that you also think of the downside of staying in your job in this volatile environment – there is no guarantee that your firm will not be impacted in the downturn.
This year I will finish my MBA with the Open University Business School in the UK. I understand that this type of MBA differs from the elite MBAs but I wonder whether my prospects are now better because I’m looking at jobs and salaries that top MBAs probably aren’t interested in; or are they worse because top MBAs will be flooding the market?
SS: I think that competition for a lot of jobs will be tougher as not only MBAs are looking for jobs. You have learned great things during your MBA and as a working professional. I would recommend concentrating your efforts on investigating the steps you will need to reach your goal. Even after obtaining your MBA, you might still need to acquire certain skills to get the one position you really want. Start your research by networking with people who are in these positions today and ask them about the key skills they needed to succeed, and how they acquired those skills. If done correctly, networking will help you gather information, gain exposure to the job market, and ideally help you acquire referrals to expand your network. Networking is often a difficult process, especially as you need a lot of time, and may feel uncomfortable talking to strangers, but you will feel more at ease after a while.
Where are the pockets of finance that are still recruiting?
BL: Investments – sales and trading, equity analysts, private client/wealth management; finance – corporate finance, business analysis, risk management, accounting/tax.
SS: This is a very broad question and difficult to answer in detail, so I will also stay fairly high level. If I look at our recent graduates, 19 per cent found positions in finance at graduation. The majority is joining investment or retail banks (both global as well as local players), asset management, financial services (certain countries specifically for leasing and credit cards) as well as PE funds (harder to get, increase in ME jobs with investments in Asia and Africa). I-Banks have reduced but not stopped their recruitment, HSBC is rolling out a big recruitment programme for the international retail business. In addition, a lot of industry companies offer very interesting finance opportunities – even in M&A.
Do you expect a rise in the number of graduates looking for a job in emerging markets? If so, in which industries?
BL: Job growth in emerging countries, while slowing, continues to be better than job growth in the EU and US. Many companies are counting on the emerging countries for their current and future expansion. I anticipate the number of available jobs in emerging markets for MBAs to grow at a faster pace than in the US or the EU for at least the next several years. However, with this supply of jobs comes an incredible amount of demand. More MBA graduates and experience hire candidates are considering opportunities in emerging markets this year and in the future. The following industries continue to have options for MBAs: FMCG/Consumer Products, Technology, Consulting and Financial Services.
Students expecting to work in emerging countries must have a keen understanding of the culture, as well as strong language skills. They must also have a well developed reason for wanting to work in an emerging country. It can’t just be because “that’s where the jobs are”. Positions such as segment/product management, business development/sales, IT development/design, project management, risk management, business analysis and supply chain/strategic sourcing are in demand at companies in emerging countries.
SS: Vittorio, yes, we can already see a trend of job applications in certain countries rising. Part of it is due to the fact that more nationals of emerging countries would like to return to participate in the local economy, and more non-emerging country nationals see job opportunities in these markets. It will become increasingly important to navigate your career through both markets. We have seen a rise in applications to positions in Africa (Nigeria, Gabon, Angola, South Africa, North Africa), Asia (India, where lots of people apply; China where the market is very unstructured; but also Vietnam, Thailand) and Latin America. All industries are covered, although for consulting for example you will need at least the local language or work experience in the region. The pay in most of these countries is not at the same level as in the US/western Europe, but you gain valuable experience.
In a difficult economic environment, protectionism finds new advocates. In such an environment, is it advisable for a foreign student to take out a big student loan and gamble on an MBA in an American or UK university only to risk discrimination when he or she then looks for a job there?
Vivek Gupta, New York
BL: In difficult economic environments, countries tend to look out for their own. This is certainly true in regards to hiring decisions. If your goal is to work in the US or UK immediately after graduation then I would advise to go to an American or UK university for your MBA. You will have a greater opportunity to meet with companies offering to sponsor your visa. You will also be able to connect with UK or US based companies looking to expand in your home country. Many MBAs have started work in their home country and then been transferred to the US or UK after 18 to 24 months. While there is no guarantee that a job will be available immediately after graduation, it would be even harder to try to get a job in the US or UK in today’s market if you pursue your MBA at a school not located in either of these countries.
SS: Vivek – I am almost amazed by the large number of MBA students who change their mind completely on what they want while doing the MBA. If the geographic location is the most important factor for you, and you currently have a work permit for the country that you would risk losing, I would think twice about the MBA. If however, the function, the firm, and the opportunities are more important to you, whether you start in NY, Singapore, London or Beirut should not matter. We have seen many firms extending offers in countries where applicants had no work permit – or starting them in their home country and transferring them after one to two years. Funnily enough, by that time many did not want to move any longer. I believe the MBA is not a short term investment – having it will not guarantee you a job in a specific region – not doing it will not help you either. The biggest asset for me is our alumni network – with 37,000 alumni in over 160 countries, this group of talented, entrepreneurial and extremely helpful people will assist current students and can help you get closer to your target job.
What relevance could an MBA still hold for someone who wanted to work in banking or investment? And will having an MBA give someone an advantage when applying for growth sectors that may require specialisation, such as energy?
Kamal Gakhar, Paris
BL: While the number of available positions in the financial services industry has declined over the past year, recruiters are still putting a premium on candidates who possess an MBA. The quantitative knowledge, skills and abilities you receive from your MBA education is invaluable to financial services companies. Many of our client partners are excited at the quality of the first year MBAs and their willingness to pursue an opportunity in financial services in spite of this market. Having an MBA is also advantageous as you search for opportunities in sectors that require specialisation. Anything you can do to set yourself apart is important in today’s recruiting environment. You will also make yourself more valuable if you can obtain an internship or consulting project in one of the specialised sectors.
SS: Kamal – be aware that “just the MBA” will not do. Recruiters will check whether you have understood their business, so do your homework. Understand the market, the company and its competitors, read about industry trends, or new products. One of our recent graduates wanted to join the Clean-Tech sector and spent many weeks working on (unpaid) research projects, going to industry conferences to gain the knowledge and commitment he needed to demonstrate in the interviews. Just weeks after graduation he signed for his dream job in London. Banks recruit MBAs in associate positions in investment bankin, sales and trading, research, asset management, private banking and retail banking for example. The MBAs will offer a different skill-set and often industry knowledge and a network that can be used within these positions. And while the overall recruiting numbers are down, no bank has stopped recruiting at any of their “core schools”. The same is true for other sectors – many industry firms look for leadership talent that you may have developed in a different sector or function. The MBA will give you a structure that makes the career change easier – besides the core courses and electives, you will have a number of career management sessions, skills workshops, networking opportunities and tailored advice to your background and goals.
I have a master’s degree in sociology and I’m currently working as an analyst at an investment company. I hope to become CFA qualified in a couple of years. If I want to get a job in a global financial company should I also have a master’s in finance?
BL: Getting a job with a global financial company will not be impossible with your sociology degree and work experience. The CFA designation will also be very helpful. However, you will have more and better job opportunities in global finance with an MBA or master’s in finance.
SS: Depending on your longer term career targets in finance (banking, asset management, private banking, financial services, etc), the CFA could be sufficient. I would recommend that you speak to people either in your own company or in positions you would like to reach one day, and ask them about the main qualifications for the job. There will always be exceptions of course, but if a majority of people in your dream job have an MiF, then I would consider doing one yourself.
I finished an MBA in Barcelona in 2005. I’m now a senior engineer at Toyota Europe. Which are the best markets for an engineering and MBA background with mostly manufacturing experience?
Daniel Sanchez, Barcelona
BL: Having an engineering background and an MBA is one of the best combinations in today’s economy. I am not sure what type of position you are considering but I would concentrate on looking for other engineering opportunities. This will be your easiest entry point into an organisation because the supply of and demand for engineers is in favour of the candidate. I would then show how your MBA has helped with your accomplishments at Toyota. Remember, your next company is looking for transferrable skills and what you can accomplish for them. As for the best markets, I would concentrate on the emerging countries as that is where the most growth and need will be during the next several years. If you are more interested in industries, I would consider fast moving consumer goods (FMCG), healthcare and consulting.
SS: Daniel – if you want to stay in manufacturing, and depending on the industry you are targeting, look at China, France, South Korea, or Kuwait for example. But most importantly – ask yourself what you want to do and who you want to work for. There are many fields which will require the skills and experience you have gained in your work and MBA. Go back to the material you may have received from your career services while you were doing your MBA (or check if your school offers services for alumni), and take the time to reflect on your career aspirations. Understanding your competencies, your interests and your values will help you find your next career – and maybe you can create your own opportunity by setting up your own business.
After working for a major bank on Wall Street I was laid off. I moved back to LA to work for a small Japanese private equity company that which went bankrupt. That was in December. I applied to a few business schools and just received a job offer to work at an asset management company. Should I still pursue my MBA or take the well-paying job in finance?
Rey Farooq, Los Angeles
BL: It all depends on your situation and where you think your employment prospects will be when you finish your MBA. Many of the MBAs who are graduating this spring left very good jobs two years ago with hopes of finding even better opportunities. Unfortunately, the way the job market is today, many of the graduating MBAs are still looking for an opportunity or have had to settle for the best available job. Having a well-paying job with an asset management company is great in this market. How secure is the position and the company? If you enjoy the job and feel like you can grow with the company over the next several years, your best bet may be to continue working with your present firm and look for a business school with a part-time or evening MBA programme. It is nearly impossible to time the employment market.
SS: It really depends why you would be doing the MBA. If it is merely to “fill the gap” until better times, and if you are passionate about this job, consider taking it. Before doing so, I would advise you to think about longer term career goals and how this job or an MBA can help you reach them. As you have seen, jobs in finance can be gone quickly these days – so evaluate your longer term prospects. An MBA is a long term investment – not only the learning, but the network you will be able to join and create will be with you for the rest of your life and repay the initial investment multiple times.
I am looking to start studying for an MBA in healthcare manangement. What are the current prospects for securing a job in the health-related sector?
Zvik Kang, London
BL: The health-related sector – healthcare, biotech, pharma, etc, – continues to be the bright spot in today’s economy. Prospects for securing a position in this sector for MBAs, especially those with a background in the sciences, should be very good for the next several years.
SS: The healthcare sector is less impacted by the current economic downturn – the sector is undergoing some interesting restructuring and facing legislative challenges, but overall the demand for healthcare is strong and is likely to remain strong. At Insead, we have seen a good mix of companies recruiting on and off campus – large pharmaceutical companies, medical equipment manufacturers, biotech firms, hospital management and consulting firms are looking for talent globally. If you are interested in a general management path – start with sales and/or marketing roles. They will help you understand the products, customers and overall market and allow you to move up fairly quickly if you are successful.
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